SEVENTH AMENDATORY AGREEMENT,
CONSENT AND WAIVER
FLEET BANK, N.A. (formerly known as
NATWEST USA CREDIT CORP.), as Agent and as a Lender
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXX FINANCIAL, INC., as a Lender
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
as of May 15, 1996
FARM FRESH, INC.
FF HOLDINGS CORPORATION
c/o Farm Fresh, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Revolving Credit Agreement dated as of December 10, 1993 (as
amended to date, the "Credit Agreement") among Farm Fresh,
Inc., the Guarantors named therein, the Lenders named therein,
and Fleet Bank, N.A. (formerly known as NatWest USA Credit
Corp.), as Agent
Ladies and Gentlemen:
Reference is made to the above-captioned Credit Agreement. You
have advised the Agent and Lenders that the Borrower desires to (i) enter into a
stock purchase agreement to be dated on or about June 1, 1996 (the "Store # 824
Agreement") between the Borrower and Community Pride, Inc. ("Community Pride"),
pursuant to which the Borrower intends to sell, and Community Pride intends to
purchase, the stock of Farm Fresh 824, Inc., a subsidiary of Borrower formed
solely for the purpose of holding and effecting the sale of store assets (the
"Store # 824 Assets") located at Store #824 of the Borrower located in Richmond
Virginia and enter into an agreement with Community Pride pursuant to which the
Store #824 lease would be assigned to Community Pride and (ii) enter into an
asset purchase agreement dated May 3, 1996 (the "Store # 191 Agreement", and
together with the Store # 824 Agreement, each an "Agreement" and collectively,
the "Agreements") between the Borrower and Xxxx-Xxxxx Xxxxxxx, Inc.
("Xxxx-Xxxxx"), pursuant to which the Borrower intends to sell, and Xxxx-Xxxxx
intends to purchase, the lease and store assets (excluding inventory other than
prescription drugs) (the "Store # 191 Assets" and, together with the Store # 824
Assets, the "Sold Assets") located at Store #191 of the Borrower located in
Elizabeth City, North Carolina.
Section 6.12 of the Credit Agreement requires Borrower to
pledge, pursuant to the Pledge Agreement, the stock of any newly created
subsidiary and cause any such subsidiary to become a Guarantor. Section 7.05 of
the Credit Agreement restricts the ability of the Borrower to sell, assign or
otherwise dispose of any of its assets. Section 7.06 of the Credit Agreement
restricts the ability of Borrower to own or acquire any stock, obligations,
assets or securities of any other person. Section 2.07(c) of the Credit
Agreement requires that the Commitment thereunder be reduced in connection with
certain asset sale transactions. Section 2.09(f) of the Credit Agreement
requires that the Borrower give the Agent certain prior written notice with
respect to certain events, including certain prepayments.
You have requested that the Agent and Lenders (a) consent to
the sale of the Store # 824 Assets pursuant to the terms of the Store # 824
Agreement and the assignment of the Store # 824 lease (the "Store # 824
Transaction") and consent to the sale of the Store #191 Assets pursuant to the
terms of the Store # 191 Agreement (the "Store #191 Transaction" and together
with the Store #824 Transaction, collectively, the "Transactions"); (b) consent
to the Borrower's formation of Farm Fresh 824, Inc. for the sole purpose of
holding the Store #824 Assets and effecting the Store #824 Transaction; (c)
waive with respect to the Store #824 Transaction their right to a pledge of the
stock of Farm Fresh 824, Inc. and their right to its becoming a Guarantor under
the Credit Agreement; (d) waive with respect to the Transactions their right to
the prior written notice of prepayment as required under Section 2.09(f) of the
Credit Agreement; (e) waive with respect to the Transactions their right to a
Commitment reduction as referenced in Section 2.07(c) of the Credit Agreement
and (f) release the security interest of the Agent with respect to the Store
#824 Assets and with respect to the Store #191 Assets.
Subject to the terms and conditions hereof, upon the
effectiveness of this Amendment, Consent and Waiver, the Agent and Lenders
hereby (a) consent to the Transactions; (b) consent to the formation of Farm
Fresh 824, Inc. for the sole purpose of holding the Store # 824 Assets and
effecting the Store # 824 Transaction; (c) waive their right to a pledge of Farm
Fresh 824 Inc.'s stock and its becoming a Guarantor under the Credit Agreement;
(d) waive their right to the prior written notice of prepayment in connection
with the Transactions as required under Section 2.09(f) of the Credit Agreement;
(e) waive their right to a Commitment reduction in connection with the
Transactions as referenced in Section 2.07(c) and (f) release any lien and/or
security interest in their favor in the Sold Assets; provided, however, that the
foregoing consent and waiver shall be limited to the Transactions as described
herein and shall not apply to any other transaction; and provided, further, that
this amendment, consent and waiver letter (the "Amendment, Consent and Waiver")
shall not diminish any of the rights, powers and remedies of the Agent or
Lenders under the Credit Agreement or otherwise with respect to any other
existing or future transaction.
You have also advised the undersigned that the Borrower has
entered into a certain equipment lease financing with AT&T Credit Corporation
("AT&T ") with respect to certain "scanner" and related equipment used in the
Borrower's business in the aggregate amount of approximately $5,000,000,
pursuant to a Lease dated April 23, 1996 between the Borrower and AT&T .
Although it was your intention to lease the foregoing equipment, $800,000 of the
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equipment was delivered by AT&T prior to consummation of the foregoing Lease and
AT&T has now requested that such $800,000 worth of equipment be treated as being
subject to a sale/leaseback transaction. Based upon your representation to the
undersigned that the foregoing transaction is in compliance with all other
provisions of the Credit Agreement, the undersigned hereby agrees that the
transaction with AT&T described above shall not count toward the $10,000,000
sale/leaseback basket set forth in Section 7.02(i) of the Credit Agreement.
This Amendment, Consent and Waiver shall be effective only
upon satisfaction of the following conditions precedent:
1. The Agent shall have received a true and complete copy of
all material agreements, documents, and instruments entered into in connection
with the Transactions (collectively, the "Transaction Documents"), each of the
foregoing to be in form and substance satisfactory to the Agent and the Lenders,
and the Borrower shall have certified to the Agent and the Lenders that the
Transactions shall have been consummated in accordance with the terms of the
Transaction Documents applicable to it and applicable law.
2. The Agent and Lenders shall have received either (i) the
consent with respect to the Transactions of all of the holders of the Borrower's
senior unsecured indebtedness and Subordinated Indebtedness or (ii) an opinion
of counsel stating that the Transactions do not conflict with or violate in any
manner the terms of any of the Borrower's Senior Notes (or the related Senior
Indenture) or Subordinated Indebtedness or in any manner affect status of the
Obligations under the Credit Agreement regarding the subordination provisions of
the Borrower's Subordinated Indebtedness, the foregoing to be in form and
substance satisfactory to the Agent and the Lenders; and
3. The Agent shall have received counterparts to this
Amendment, Consent and Waiver, duly executed and delivered by each of the Agent,
the Lenders, the Borrower and the Guarantors, and the Agent shall have
additionally received all of the following documents, each document being dated
the effective date of this Amendment, Consent and Waiver, in form and substance
satisfactory to the Agent:
(a) a certificate of the Secretary or an Assistant
Secretary of the Borrower and the Guarantor certifying the names and true
signatures of their respective officers authorized to sign this Amendment,
Consent and Waiver and the other documents to be delivered hereunder;
(b) certified copies of (i) the resolutions of the
Board of Directors of the Borrower and the Guarantor approving this Amendment,
Consent and Waiver and (ii) all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this Amendment,
Consent and Waiver and the matters contemplated hereby;
(c) a certificate signed by a duly authorized officer
of each of the Borrower and the Guarantor stating that: (i) the representations
and warranties of the Borrower
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as set forth in Article IV of the Credit Agreement and in any documents
delivered therewith, including the Loan Documents, are true and correct on and
as of the date of such certificate as though made on and as of such date (except
insofar as such representations and warranties relate expressly to an earlier
date or are based on the accuracy of schedules prepared as of a prior date);
(ii) the execution, delivery and performance by the Borrower and the Guarantor
of this Amendment, Consent and Waiver, and the Transaction Documents are within
the Borrower's and Guarantor's corporate powers, have been duly authorized by
all necessary corporate action and do not contravene (x) the charter or by-laws,
and (y) any law or any contractual restriction binding on or affecting the
Borrower or the Guarantor; (iii) no authorization, approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by the Borrower or
the Guarantor of this Amendment, Consent and Waiver; (iv) this Amendment,
Consent and Waiver and each of the Transaction Documents constitute the legal,
valid and binding obligations of the Borrower and the Guarantor enforceable
against the Borrower and the Guarantor in accordance with their respective
terms; (v) there is no pending or threatened action or proceeding affecting the
Borrower, the Guarantor or any of their respective subsidiaries before any
court, governmental agency or arbitrator, which may materially adversely affect
the financial condition or operations of the Borrower, the Guarantor or any
subsidiary or which purports to affect the legality, validity or enforceability
of this Amendment, Consent and Waiver, and/or any of the Transaction Documents;
and
(d) a favorable opinion of Xxxxxxx & Xxxxxxx, counsel
for the Borrower and the Guarantor, in a form reasonably acceptable to the Agent
and Lenders.
4. The entire net proceeds of the Sold Assets (to a maximum
amount equal to the principal amount of Loans outstanding at such time) shall
have been applied by the Borrower to a repayment of the outstanding principal
balance of the Loans, but such repayment will not reduce the Commitment under
the Credit Agreement.
The parties hereto acknowledge that the Store #824 Transaction
and the Store #191 Transaction may be consummated on the same or different dates
and that the foregoing conditions precedent with respect to such Transactions
may be satisfied on the same or on different dates. In the event that the
conditions precedent have been satisfied with respect to the Transactions on
different dates or with respect to one Transaction and not the other, then the
consent of the Agent and the Lenders shall be limited to the Transaction for
which all conditions precedent have been satisfied.
By your signature below, you jointly and severally (a) repeat
each of the representations and warranties set forth in Article IV of the Credit
Agreement and in any documents delivered therewith, including the Loan
Documents, (except insofar as such representations and warranties relate
expressly to an earlier date or are based on the accuracy of schedules prepared
as of a prior date); (b) certify that, both before and after giving effect to
the Transaction, the terms of this Amendment, Consent and Waiver and the terms
of the Transaction Documents, no Default or Event of Default has occurred and is
continuing (other than as the
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Borrower has notified the Agent in writing on or before the effective date of
this Amendment, Consent and Waiver); and (c) confirm and reaffirm all collateral
security, guarantees and other agreements executed or furnished by you in
connection with the Credit Agreement.
Except as modified hereby, all terms and conditions of the
Credit Agreement and the Loan Documents remain in full force and effect.
Terms used but not defined herein shall have the meaning
assigned thereto in the Credit Agreement.
The Borrower agrees to pay on demand all costs and expenses of
the Agent in connection with the preparation, execution, delivery,
administration, modification and amendment of this Amendment, Consent and Waiver
and the other instruments and documents to be delivered hereunder, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Agent with respect thereto and with respect to advising the Agent as to
its rights and responsibilities hereunder and thereunder. The Borrower further
agrees to pay on demand all costs and expenses, if any (including, without
limitation, reasonable counsel fees and expenses), in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Amendment, Consent and Waiver and the other instruments and documents to be
delivered hereunder, including, without limitation, reasonable counsel fees and
expenses in connection with the enforcement of rights under this paragraph. In
addition, the Borrower shall pay any and all stamp and other taxes payable or
determined to be payable in connection with the execution and delivery of this
Amendment, Consent and Waiver and the other instruments and documents to be
delivered hereunder, and agrees to save the Agent and each Lender harmless from
and against any and all liabilities with respect to or resulting from any delay
in paying or omitting to pay such taxes.
This Amendment, Consent and Waiver may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
This Amendment, Consent and Waiver shall be governed by, and
construed in accordance with, the laws of the State of New York.
Very truly yours,
FLEET BANK, N.A. (formerly known as
NATWEST USA CREDIT CORP.), as
Agent and as Lender
By:/s/ Fleet Bank, N.A.
Title:
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XXXXXX FINANCIAL, INC.,
as Lender
By:/s/ Xxxxxx Financial, Inc.
Title:
FARM FRESH, INC.
By:/s/ Farm Fresh, Inc.
Title:
FF HOLDINGS CORPORATION,
as Guarantor
By:/s/ FF Holdings Corporation
Title:
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